Georgia · what’s new
What is new in Georgia for 2026: the 4.99% rate, a bigger standard deduction, and Georgia’s own tips and overtime breaks
The 2026 Georgia return is the first at 4.99%, the first with a $15,000 or $30,000 standard deduction and a $5,000 dependent exemption, and the first with a $250 child credit. It is also the year Georgia said no to most of the 2025 federal law: the federal tips, overtime, car-loan and senior deductions do not reach Form 500, and Georgia wrote two small subtractions of its own instead. What changed, what did not, and what to expect when the 2026 return is set beside the 2025 one.
By Charles Trautman, EA, editor
Need to Know Tax · written from Georgia Department of Revenue sources, November 3, 2026; updated November 12, 2026 after the election · not yet reviewed by a Georgia practitioner
The bottom line
- The rate is a flat 4.99% for all of 2026, down from 5.19%; the cut was signed in May and reaches back to January 1, so many refunds will be larger than usual.
- The standard deduction is $15,000 single and $30,000 joint, and the dependent exemption is $5,000.
- Georgia does not follow the federal tips and overtime deductions but allows its own subtractions of up to $1,750 each for 2026 through 2028.
- Whether the rate falls to 4.865% for 2027 depends on a state certification due by December 1, 2026.
House Bill 463, signed May 11, 2026 and retroactive to January 1, cut Georgia’s flat rate from 5.19% to 4.99%, raised the standard deduction from $12,000 to $15,000 for single filers and from $24,000 to $30,000 for joint filers, and raised the dependent exemption from $4,000 to $5,000. For a single worker earning $60,000 that is $246 less Georgia tax than 2025; for a couple with two children earning $110,000 it is about $800 less once the new $250 child credit is counted. The other half of the story is what Georgia declined to adopt. The 2025 federal law’s deductions for tips, overtime, car-loan interest and seniors come off the federal return after adjusted gross income, which is where Form 500 starts, and House Bill 1199 kept them out of Georgia law. In their place Georgia allows up to $1,750 of cash tips and up to $1,750 of overtime premium as subtractions for 2026 through 2028. Social Security is still untaxed, the retirement income exclusion is still $35,000 at 62 and $65,000 at 65, and there is still no local income tax.
Three bills did the work, all in the 2026 session. House Bill 1199, signed March 20, 2026, moved Georgia’s reference to the Internal Revenue Code to January 1, 2026 and listed what the state would not follow. House Bill 1000, signed the same day, paid a one-time surplus refund of up to $500 from May 2026. House Bill 463, signed May 11, cut the rate, raised the deductions, created the tips and overtime subtractions, and repealed a list of business credits. A fourth bill from 2025, House Bill 136, created the child tax credit that first appears on the 2026 return.
The rate: 4.99%, with more cuts on a trigger
Georgia replaced its six brackets, which topped out at 5.75%, with a single rate beginning in 2024. The rate was 5.39% for 2024, 5.19% for 2025, and is 4.99% for 2026. Each $10,000 of Georgia taxable income costs $499 of tax instead of $519.
HB 463 also rewrote the schedule for what comes next. The rate falls another 0.125 points, to 4.865%, in any year the state meets three revenue tests certified by December 1 of the year before, and keeps stepping down toward 3.99%. In the same years the standard deduction rises $375 single and $750 joint, toward $18,000 and $36,000, and the dependent exemption rises $125, toward $6,000. The first year that can happen is 2027, and the certification that decides it is due by December 1, 2026; this page will carry the answer when it is made. For the 2026 return, the figures are fixed: 4.99%, $15,000 and $30,000, $5,000.
| Item | 2025 | 2026 |
|---|---|---|
| Flat rate on Georgia taxable income | 5.19% | 4.99% |
| Standard deduction, single, head of household, married filing separately | $12,000 | $15,000 |
| Standard deduction, married filing jointly | $24,000 | $30,000 |
| Dependent exemption, each | $4,000 | $5,000 |
| Personal exemption, taxpayer and spouse | None | None |
| Retirement income exclusion, 62 to 64 / 65 and over, per person | $35,000 / $65,000 | $35,000 / $65,000 |
| Georgia child tax credit, per child under 6 | None | $250, nonrefundable |
| Child and dependent care credit | 50% of federal | 50% of federal |
| Tips subtraction / overtime subtraction | None | Up to $1,750 each |
| Eligible itemizer credit, per taxpayer | $300 | $300 |
| Surplus refund paid during the year | None | $250 / $375 / $500 (HB 1000) |
The 2026 rate, standard deduction and dependent exemption are confirmed in the Department of Revenue’s June 2026 Employer’s Tax Guide. The 2026 Form 500 and IT-511 booklet had not been published when this was written, so line numbers for the new items are given as “to come.”
The standard deduction: a 25% jump
This is the bigger change for most households, bigger than the rate. Georgia’s standard deduction had been $12,000 and $24,000 since the 2024 flat-tax law. At $15,000 and $30,000 it now sits within a few hundred dollars of the federal figures for 2026, $16,100 and $32,200, which is unusual among states that start from federal AGI. The extra $3,000 single or $6,000 joint is worth $150 or $299 of tax at 4.99%, before the rate cut is counted.
Two things did not change. There is still no personal exemption for the taxpayer or spouse; the deduction does all the work. And Georgia still gives no extra standard deduction for age or blindness; the 2025 Form 500 shows none and HB 463 added none. Georgia’s break for age is the retirement income exclusion, covered in Georgia for retirees.
The forced-itemizing rule also did not change. A taxpayer who itemized on the federal return must itemize for Georgia, starting from the federal Schedule A total, adding back state income tax, and limiting the state and local tax piece to $10,000. With the Georgia standard deduction now at $30,000, more couples will find their Georgia itemized total falls below a standard deduction they are not allowed to take. The $300-per-taxpayer eligible itemizer credit is the legislature’s answer, and it is unchanged for 2026. How Georgia income tax works has the arithmetic.
What Georgia did with the 2025 federal law
Georgia adopts the Internal Revenue Code as of a fixed date and updates that date each spring, so nothing in the July 2025 federal law reached Georgia until the legislature acted. HB 1199 moved the date to January 1, 2026 and then carved out exceptions. The result, item by item:
| Federal change | Georgia |
|---|---|
| Tips deduction, up to $25,000 | Not adopted. Georgia-only subtraction of up to $1,750 of cash tips, 2026 through 2028, for occupations on the Treasury tipped-occupation list (HB 463) |
| Overtime deduction, up to $12,500 | Not adopted. Georgia-only subtraction of up to $1,750 of qualified overtime compensation, the premium half, for full-time hourly employees, 2026 through 2028 (HB 463) (verify who qualifies) |
| $6,000 senior deduction | No effect. Taken below AGI federally, so it never reaches Form 500; Georgia added no version of its own |
| Car-loan interest deduction | Not adopted; no Georgia deduction |
| SALT cap raised to $40,000 | Not adopted. Georgia itemized deductions keep the $10,000 limit on state and local taxes, and state income tax is added back regardless |
| 100% bonus depreciation, and new §168(n) expensing | Not adopted, as Georgia never has. Depreciation is recomputed and the difference runs through Schedule 1 |
| Higher §179 expensing limits | Adopted, except §179(e) real property (verify) |
| Casualty losses limited to federal disasters; miscellaneous itemized deductions ended for good | Adopted |
| 0.5%-of-AGI floor on charitable deductions for itemizers; 35% cap on itemized-deduction benefit | Adopted |
| Enhanced §1202 small business stock exclusion | Adopted (verify in enacted text) |
| Non-itemizer charitable deduction; QBI deduction | No effect either way; both are below AGI |
Georgia kept full expensing of research costs under §174 throughout the years the federal law required amortization, so Georgia businesses have no catch-up deduction to take and none to add back.
The pattern is consistent. Anything that would have cost the state money by flowing through federal AGI, bonus depreciation above all, Georgia blocked. Anything that comes off the federal return after AGI, Georgia never saw and did not need to block. The tips and overtime subtractions are the one place the legislature spent money to follow the federal idea, and it spent a tenth of what full conformity would have cost.
Tips and overtime: $1,750 each, Georgia style
A server with $9,000 of cash tips in 2026 deducts all $9,000 on the federal return. On Form 500, the tips are in federal AGI, and Georgia lets up to $1,750 of them back out, worth $87 of tax at 4.99%. The same $1,750 cap applies to the overtime premium of a full-time hourly employee. Both subtractions run for tax years 2026, 2027 and 2028 and then expire unless renewed.
Where the subtractions go on the 2026 Form 500 has not been published; expect new lines on Schedule 1. Whether a joint return with two qualifying spouses gets $3,500 of each is not stated in the bill summaries we read (verify). The Department’s June 2026 Employer’s Tax Guide says employers do not reduce Georgia withholding or W-2 Box 16 wages for either item; the amounts are reported to the Department on the year-end W-2 and 1099 filings, so the subtraction is claimed on the return, not in the paycheck.
The $250 child tax credit, year one
House Bill 136, signed May 13, 2025, created Georgia’s first child tax credit: $250 per child under age 6, first claimed on the 2026 return. It is nonrefundable and does not carry forward, so a family whose Georgia tax is already zero gets nothing from it, and it is prorated for part-year and nonresident filers. The same bill raised the child and dependent care credit from 30% to 50% of the federal credit starting with 2025 returns, so that one is in its second year. Georgia still has no earned income credit. The form or line for the child credit is to come. Georgia for families covers the whole set.
The HB 1000 surplus refund
Georgians who filed both a 2024 and a 2025 return received a one-time refund beginning in May 2026: up to $250 single or married filing separately, $375 head of household, $500 married filing jointly, limited to the 2024 Georgia tax actually owed. It is not Georgia income; HB 1000 says so. It may be federal income for someone who itemized in 2024 and deducted Georgia income tax, in which case the Georgia return subtracts it back out on Schedule 1, line 12. Retirees whose 2024 Georgia tax was zero because of the retirement exclusion got nothing, since the refund cannot exceed 2024 tax. No refund has been enacted for 2027.
Repealed and expiring
HB 463 paid for part of the rate cut by repealing credits as of January 1, 2026: the telework expense credit, the alternative fuel vehicle and charger credits, the PPE and medical equipment manufacturer credits, the port traffic credits, and the headquarters jobs credit. Few households used any of them.
Property tax: the cap becomes mandatory in 2027
Nothing on Form 500, but the live issue in Georgia. The 2024 law (HB 581, approved by voters that November) froze each homestead’s assessed value at a base year and lets it grow only with inflation, and let local governments and school systems opt out; roughly a third did (verify count). Senate Bill 33, signed May 11, 2026, ends the opt-outs and makes the cap mandatory statewide beginning with the 2027 tax year, and authorizes a 1% local homestead option sales tax by referendum to replace the lost revenue. Senate Bill 566 requires tax bills to show the value of each exemption and creates a statewide homestead database to catch double claims, with a 50% penalty for failing to report lost eligibility. Homestead and senior exemptions are still applied for at the county by April 1.
What was on the ballot
No income or sales tax question was on the November 3, 2026 ballot. Amendment 1, approved with about 54%, raises the acreage limit for conservation-use assessment of farm and timber land from 2,000 to 4,000 acres, a property tax item for landowners, beginning in 2027. Amendments 2 and 3, on probate judge elections and a 9-1-1 fund, are not tax measures.
Worked example: the same two households, 2025 and 2026
A single worker with $60,000 of wages and no dependents, and a married couple with $110,000 of wages and two children, one of them age 4. Both take the standard deduction. Nothing about them changes; only the law does.
| Single, 2025 | Single, 2026 | Couple, 2025 | Couple, 2026 | |
|---|---|---|---|---|
| Federal AGI (Form 500 line 8) | $60,000 | $60,000 | $110,000 | $110,000 |
| Standard deduction | −$12,000 | −$15,000 | −$24,000 | −$30,000 |
| Dependent exemptions | $0 | $0 | −$8,000 | −$10,000 |
| Georgia taxable income | $48,000 | $45,000 | $78,000 | $70,000 |
| Tax at 5.19% / 4.99% | $2,491 | $2,246 | $4,048 | $3,493 |
| Georgia child tax credit | $0 | $0 | $0 | −$250 |
| Georgia tax | $2,491 | $2,246 | $4,048 | $3,243 |
| Change from 2025 | −$246 | −$805 |
Of the couple’s $805, $299 comes from the larger standard deduction, $100 from the two larger dependent exemptions, $156 from the rate cut, and $250 from the child credit. Because the credit is nonrefundable, a family with less income and a Georgia tax under $250 gets only part of it.
Behind the scenes: why the refund will look different
HB 463 was signed May 11, 2026, and the Department told employers to keep withholding at 5.19% for pay before that date and to switch to 4.99% from the signing date forward. Wages paid from January through early May were therefore withheld under 2025 rules while the tax on them is figured under 2026 rules. For the single $60,000 earner above, that is roughly a third of a year at the old rate and deduction, on the order of $90 of extra withholding, coming back as refund. A larger Georgia refund in 2027 is not a sign of anything wrong; it is the retroactive rate cut arriving.
The revenue triggers explain why the rate schedule reads the way it does. Georgia’s 2022 flat-tax law tied each future cut to three tests on state revenue and the size of the revenue shortfall reserve, certified each December 1 (verify the tests). HB 463 kept the tests, moved the final target from 4.99% to 3.99%, and raised the reserve ceiling from 15% to 20% of revenue with a “Taxpayer Relief Fund” for anything above it. The legislature can also cut faster by ordinary bill, as it did for 2026.
What to bring
- Last year’s Form 500, so the 2026 figures can be compared line by line
- Every 2026 W-2; the Georgia withholding in Box 17 will reflect two rates
- For a tipped or hourly worker, the W-2 showing cash tips and overtime, and a pay stub or employer statement breaking out the overtime premium
- Dates of birth for each child, for the under-6 test on the new credit
- The amount of the HB 1000 surplus refund received, and the 2024 return showing whether Georgia income tax was itemized
- If itemizing federally, the Schedule A, so the Georgia itemized total and the $300 credit can be figured
- For a business, farm or rental, the federal depreciation schedule, for the Schedule 1 adjustment
Questions people ask
Is the Georgia rate really 4.99% for all of 2026, even though the bill passed in May?
Yes. HB 463 applies to taxable years beginning on or after January 1, 2026. The withholding tables changed May 11, but the tax on the return is figured at 4.99% on the whole year’s income.
Did Georgia pass “no tax on tips”?
Not the federal version. Georgia decoupled from the $25,000 federal tips deduction and the $12,500 overtime deduction. Instead, for 2026 through 2028, up to $1,750 of cash tips in a tipped occupation and up to $1,750 of overtime premium for a full-time hourly employee come off Georgia income. At 4.99% each is worth at most $87.
Does the federal $6,000 senior deduction lower my Georgia tax?
No. It is taken after AGI on the federal return, and Form 500 starts at AGI. Georgia’s own age-based break is the retirement income exclusion, $35,000 at 62 and $65,000 at 65 per person, which is far larger for most retirees.
I itemize and the SALT cap went to $40,000 federally. Does Georgia follow?
No. Georgia keeps a $10,000 limit on the state and local tax piece of itemized deductions, and adds back state income tax in any case, so the higher federal cap changes nothing on Form 500. You do still have to itemize for Georgia if you itemized federally, and you get the $300-per-taxpayer itemizer credit for doing so.
Is the HB 1000 refund taxable?
Not by Georgia. Federally, only if you itemized in 2024, deducted Georgia income tax, and got a benefit from it; then the taxable part goes on the federal return and comes back out on Form 500 Schedule 1, line 12.
Will the rate drop again for 2027?
Only if the three revenue tests are met by December 1, 2026, in which case it goes to 4.865% and the standard deduction and dependent exemption step up. Watch for the Department’s announcement; until then, treat 2027 as “to come.” The age-65 retirement exclusion does rise to $70,000 for 2027 regardless.
A lower rate, a bigger deduction, and a state that kept the federal law at arm’s length
Expect a smaller Georgia bill than 2025 and a larger refund; do not expect the federal tips, overtime or senior deductions to show up on Form 500.
Written by Charles Trautman, EA, editor · Need to Know Tax, Lone Tree, Colorado
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Forms and official pages named in this article
Sources and where to check
- Georgia DOR, 2026 Employer’s Tax Guide, updated June 2026
- Georgia DOR, 2025 IT-511 Individual Income Tax Booklet
- Georgia House Ways and Means, 2026 Session Brief: HB 463, HB 1000, SB 33, SB 566
- Georgia Society of CPAs: Governor signs conformity bill HB 1199
- Georgia DOR, HB 1000 Surplus Tax Refund FAQs
- Ballotpedia, Georgia 2026 ballot measures